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THE MONEY BUSINESS

The art museum's new boss gets a crash-course in American arts funding

David Franklin's first days at the Cleveland Museum of Art have been marked by significant change. It's not just the new job or finding a new house in Shaker Heights, or enrolling his kids in new schools.

The new director comes from Ottawa, Ontario, where he was deputy director of Canada's National Gallery. An internationally respected scholar of Italian Renaissance and Baroque art, he used to play pickup hockey with museum staff on his lunch hour. The odds seem stacked against that happening here.

But more important, Franklin comes from a place where museums are funded almost entirely by the federal government. In the same way that tax dollars foot the bill for national health care in Canada, they also pay for museums. In Cleveland, and all over the United States, the arts are funded almost exclusively by private money.

The distinction sounds especially stark if you listen to David Baxter, the finance director at Franklin's previous museum. "We are a wholly owned crown corporation of the government of Canada," he says. "As part of the federal program, we get funding for operating, capital projects, and art acquisition."

The Canadian museum doesn't get all of its funding from the government, but the vast majority — 81 percent of the 2010 budget — comes from that single source. The remaining 19 percent comes mostly from sources familiar in the U.S: the museum gift shop, rental of spaces, and parking. The National Gallery's newly created development department is expected to raise only $1.9 million this year — just over 3 percent of its $58 million (Canadian) budget.

The Cleveland museum, by comparison, expects to raise more than $7 million this year, plus millions more for construction, art procurement, and other expenses.

"While we understood the differences in how the National Gallery of Canada is funded, we were impressed by the initiative David showed in seeking funds from private individuals and foundations," says R. Steven Kestner, chairman of the Cleveland museum's search committee and a national executive partner in the law firm Baker and Hostetler. Franklin, he adds, was effective in the Canadian museum's nascent fund-raising efforts and at courting donations of art. One fund-raiser under his leadership grossed $2 million.

For his part, Franklin sees the different funding pressures clearly. "It does affect the relationship with the museum's donors," he says. "It is much more critical [in privately funded museums], because the donors are helping museums sustain themselves. If you fail at that in Cleveland, the museum will fail."

Of course, neither source of money is guaranteed. Tom Schorgl, head of the Community Partnership for the Arts and Culture, the group that led the fight for Cuyahoga County's cigarette tax for the arts, says that publicly funded museums must make the case that they are worthy every year.

"You have to make the same arguments, but to a different set of folks — to donors, members, and foundations, as opposed to the legislature," he says.

But it's not really that simple. For government-funded museums, most of the budget depends on a single sales pitch. As Franklin says, "The number of relationships [in Cleveland] makes it much more complex. We had one contact: the Minister of Heritage. That is the key relationship for the National Gallery of Canada."

In theory, that could make for very high stakes. But in reality, as Baxter observes, funding of Canadian museums has been very constant.

By contrast, the Cleveland museum has to deal with a volatile stock market's effect on both its endowment and the pocketbooks of dozens of grant-making institutions and more than 21,000 individual donors and members. Its largest and most dependable source of public funding — the cigarette tax — is just a $1.5 million fragment of the museum's $30 million overall budget. Other sources of public funding, such as the Ohio Arts Council and the National Endowment for the Arts, all require separate pitches for what are comparatively small payoffs.

There are other key differences, too — especially in what the people in control of the purse strings want to hear.

"The main concern [of the Canadian government] is that you are fiscally responsible and have balanced budgets, that your infrastructure is in good shape, and that you have good employee relationships," Franklin says. "They are not so interested in the programming or message. Here it's the opposite. You have to have a strong message and content to raise money.

"In the [Canadian] system, you are always treading water — even trying not to be noticed, not to be controversial. Here, people are watching for content."

Franklin arrives in Cleveland at a critical time. Not only is the museum working to raise $130 million to pay off bonds that will complete a $350 million renovation and expansion; it's also approaching its 100th anniversary — a milestone that offers a one-time-only fund-raising opportunity critical for any non-profit. Its endowment, valued at more than $800 million just a few years ago, fell to around $500 million in early 2009 and sits now at about $600 million — still among the largest in the nation. Feeding the endowment, raising operating costs, and paying off construction bonds are all on the agenda.

Of course, he has a staff. He took the reins just as the museum's search for a development director was entering its final phase. Choosing from a short list, Franklin tapped veteran fund-raiser August Napoli, who had previously led a $300 million project for the Cleveland Clinic Heart Center, among other major development drives.

"Obviously, a lot of my time will be spent at events actively fund-raising. I see myself joined at the hip with [Napoli]. My role is to inspire donors by banging the drum for the quality of the product."

Franklin's gifts for delivering quality caught the attention of the search committee. Throughout his time at the National Gallery, he curated exhibits that mingled blockbuster names with scholarly sensibility, gathering works by Leonardo da Vinci, Michelangelo, and Bernini from the world's most prominent collections.

In Cleveland, Franklin's sights are set on the years 2013 to the museum's centennial in 2016, which he hopes to celebrate with an exhibit juxtaposing Vincent van Gogh's copies of his own works. As Franklin sees it, shows like that are vital to the mission and the bottom line.

"Despite the scale of the task, I have tremendous optimism," he says. "I think Cleveland people seem to know that if we don't help ourselves, no one is going to help us."